Taxation v. Manager (In re Manager)
| Decision Date | 29 April 2015 |
| Docket Number | No. 32,940,32,940 |
| Parties | NEW MEXICO TAXATION AND REVENUE DEPARTMENT, Petitioner-Appellant, v. CASE MANAGER (TERESA MAESTAS), Respondent-Appellee, IN THE MATTER OF THE PROTEST OF CASE MANAGER. |
| Court | Court of Appeals of New Mexico |
This memorandum opinion was not selected for publication in the New Mexico Appellate Reports. Please see Rule 12-405 NMRA for restrictions on the citation of unpublished memorandum opinions. Please also note that this electronic memorandum opinion may contain computer-generated errors or other deviations from the official paper version filed by the Court of Appeals and does not include the filing date.
APPEAL FROM THE TAXATION AND REVENUE DEPARTMENT
Brian VanDenzen, Hearing Officer
NM Department of Taxation and Revenue
Hector H. Balderas, Attorney General
Nelson J. Goodin, Special Assistant Attorney General
for Appellant
Teresa Maestas
Medanales, NM
Pro Se Appellee
{1} Teresa Maestas (Taxpayer), claiming a gross receipts tax deduction pursuant to NMSA 1978, Section 7-9-48 (2000), submitted the wrong form to support her claimed deduction. By the time Taxpayer obtained the correct form the deadline for submission had passed. Taxes were assessed and Taxpayer protested. The New Mexico Department of Taxation and Revenue Hearing Bureau (the Bureau) determined that Taxpayer was entitled to the claimed deduction. Although we differ somewhat in our legal analysis, we affirm.
{2} While the parties are familiar with the facts, the time line in this case is important to this Court's decision. We will therefore be setting forth the factual background in more detail than is generally necessary for a memorandum opinion. Taxpayer worked as a case manager for the developmentally disabled across Northern New Mexico. She provided case-management services as an independent contractor for Visions Case Management, Inc. (Visions). Visions resold Taxpayer's services to the New Mexico Department of Health. Visions paid gross receipts taxes on the resale of Taxpayer's services.
{3} On August 13, 2012, the New Mexico Department of Taxation and Revenue (the Department) sent Taxpayer a notice that it would be conducting a limited scope audit and requested that she provide Non-Taxable Transaction Certificates (NTTCs)to show that her gross receipts for 2008 and 2009 were not subject to taxation. The notice gave Taxpayer sixty days or until October 12, 2012, to respond. The notice identified Laura Gage, a Department employee, as Taxpayer's point of contact.
{4} Taxpayer called Ms. Gage three times in October 2012 to inquire about the documentation she was required to provide. Taxpayer never received a return call. Taxpayer went to the Department's field office in Santa Fe to inquire about the documentation she was required to provide. Taxpayer was advised to submit all her paperwork to Ms. Gage. Ten days after the original deadline, Ms. Gage sent a letter on October 22, 2012, to Taxpayer advising her that she had until October 31, 2012, to provide the documentation requested in the August 13, 2012, notice. In response to this letter, Taxpayer once again attempted to reach Ms. Gage telephonically to determine what information or documentation she needed to provide. Again, she never received a return call.
{5} Taxpayer requested and received an NTTC from Visions. She submitted the NTTC along with her 2008 federal Schedule C and her 2009 federal 1099-MISC form directly to Ms Gage via facsimile by the October 31 deadline. It was not until November 6, 2012, that Ms. Gage sent Taxpayer a letter informing her that she had submitted a Type 2 NTTC for tangible goods instead of a Type 5 NTTC for services, that all deadlines for the audit had expired and that the Department would be assessinggross receipts tax based on the gross receipts Taxpayer reported to the IRS on her Schedule C form. The Department did not challenge the timeliness of Taxpayer's submission.
{6} On November 13, 2012, the Department assessed Taxpayer's gross receipts tax for 2008, including penalties and interest to be $3,364.38, taxes were also assessed for 2009, however, Taxpayer only protested the 2008 assessment. On January 9, 2013, the Department's protest office sent Taxpayer a letter informing her that she was liable for assessed gross receipts taxes for 2008 unless she could produce a Type 5 NTTC from Visions dated by the due date of the transaction, or by the expiration of the sixty-day period she was given in the notice of audit October 12, 2012. The Department gave Taxpayer until January 25, 2013, to submit the properly dated Type 5 NTTC. In a follow up letter dated January 17, 2013, and after receipt of the Department's audit file, the protest office notified Taxpayer that the time to submit the Type 5 NTTC had passed.
{7} It is unclear from the record when Taxpayer requested the Type 5 NTTC from Visions, but on March 14, 2013, Visions executed a Type 5 NTTC for Taxpayer. Visions also wrote a letter to the Department dated April 2, 2013, accepting responsibility for the gross receipts taxes associated with the services performed by Taxpayer. Visions' letter explained that it had initially issued the incorrect type ofNTTC to Taxpayer but had subsequently issued the correct type of NTTC in an effort to remedy the situation.
{8} An administrative hearing before the Bureau was held on April 4, 2013. The Bureau concluded that Taxpayer was entitled to the claimed deduction under the safe harbor provision of NMSA 1978, Section 7-9-43(A) (2011). Taxpayer's protest was granted. This appeal followed.
{9} On appeal, the Department argues that Taxpayer is not entitled to her claimed deduction because she failed to timely submit the correct type of NTTC to support her deduction and because the safe harbor provision does not apply. We conclude that, under the circumstances of this case, Taxpayer established her entitlement to the claimed deduction. We need not decide whether the safe harbor provision applies here because we may uphold the Bureau's decision if it is right for any reason. See Cordova v. World Fin. Corp. of N.M., 2009-NMSC-021, ¶ 18, 146 N.M. 256, 208 P.3d 901. Under the right for any reason doctrine, appellate courts may affirm a lower court's decision if it is right for any reason, "so long as the circumstances do not make it unfair to the appellant to affirm." Id. Appellate courts may take such action "if those grounds do not require us to look beyond the factual allegations that were raised and considered below." Id. (internal quotation marks and citation omitted); see Jaramillov. Jaramillo, 1991-NMSC-101, ¶ 15, 113 N.M. 57, 823 P.2d 299 (). Because our decision does not require us to look beyond the factual allegations raised and considered below and because the Department's argument before the Bureau and on appeal rests primarily with the incorrect NTTC submitted by Taxpayer, it is not unfair to the Department for us to resolve this case on that basis.
{10} We do not address any argument the Department makes related to 3.2.201.9(E) NMAC (5/31/2001), and the extent to which it precludes deductions from gross receipts tax where a taxpayer does not have the correct form to support the taxpayer's specific type of claimed deduction. This issue is raised for the first time on appeal, and as a result, Taxpayer was not given an opportunity to respond to the argument and no decision on the issue was fairly invoked by the Bureau. See Rule 12-216(A) NMRA (); see also Garcia ex rel. Garcia v. La Farge, 1995-NMSC-019, ¶ 27, 119 N.M. 532, 893 P.2d 428 ().
{11} When reviewing the Department's decision we can reverse the decision and order only if we conclude that it is "(1) arbitrary, capricious[,] or an abuse of discretion; (2) not supported by substantial evidence in the record; or (3) otherwise not in accordance with the law." ITT Educ. Servs., Inc. v. Taxation & Revenue Dep't, 1998-NMCA-078, ¶ 4, 125 N.M. 244, 959 P.2d 969 (internal quotation marks and citation omitted); see Arco Materials, Inc. v. Taxation & Revenue Dep't, 1994-NMCA-062, ¶ 2, 118 N.M. 12, 878 P.2d 330, rev'd on other grounds sub nom. Blaze Constr. Co. v. Taxation & Revenue Dep't, 1994-NMSC-110, 118 N.M. 647, 884 P.2d 803; see also NMSA 1978, § 7-1-25(C) (1989) (same). In reviewing for sufficiency of the evidence we look to the whole record and review the evidence, in the light most favorable to the agency's findings. Wing Pawn Shop v. Taxation & Revenue Dep't, 1991-NMCA-024, ¶ 8, 111 N.M. 735, 809 P.2d 649.
{12} The New Mexico gross receipts tax is assessed upon "any person engaging in business in New Mexico." NMSA 1978, § 7-9-4(A) (2010). Gross receipts includes consideration received for performing services in the state. NMSA 1978, § 7-9-3.5(A)(1) (2007). By statute "it is presumed that all receipts of a person engaging in business are subject to the gross receipts tax." NMSA 1978, § 7-9-5(A) (2002). "Ataxpayer has the burden of overcoming the statutory presumption created by Section 7-9-5" and establish that the taxpayer is entitled to any claimed deduction. TPL, Inc. v. Taxation & Revenue Dep't, 2000-NMCA-083, ¶ 8, 129 N.M. 539, 10 P.3d 863, rev'd on other grounds, 2003-NMSC-007, 133 N.M. 447, 64 P.3d 474; Wing Pawn Shop, 1991-NMCA-024, ¶ 16.
{13} The New Mexico Gross Receipts and Compensating Tax Act (the Act), NMSA 1978, §§ 7-9-1 to...
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